Senate agonies have the government in a spin

Deborah Snow and James Massola

Chaos in Senate: "I have never seen a government so incompetent in terms of the way it is handling the upper house". Photo: Alex Ellinghausen

Just over 50 years ago, famed political journalist Alan Reid sent a photographer along to a Canberra hotel to capture one of the most significant images in Australian political history.

It was a devastating shot of then Labor leader Arthur Calwell and his deputy, Gough Whitlam, forced to wait out on the street while, inside, the ALP’s then faction and union bosses – dubbed by Reid the ‘‘faceless men’’ – decided on the policies the party would take to an election.

This week that image was turned on its head. The man sitting outside the crucial gathering was the one calling the shots.

Calling the shots: Clive Palmer addresses the media at Parliament House on Thursday. Photo: Alex Ellinghausen

It was billionaire MP Clive Palmer, holding court from an antechamber outside the Senate entrance on Thursday morning as a succession of ministers and advisers scurried in and out of the chamber to plead with him over the Coalition’s much longed-for repeal of the carbon tax.

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As the government tied itself in knots trying to accommodate last-minute amendments to the repeal legislation cooked up by Palmer and his three Palmer United Party senators, the Greens, Labor and several other crossbench senators looked on in amazement at the chaos.

‘‘They are expecting the whole of Australia just to go along with a backroom deal that they have done with Clive Palmer that they can’t even explain, and nor can the Palmer people explain,’’ Greens Leader Christine Milne said on Friday.

‘‘I have never seen a government so incompetent in terms of the way it is handling the upper house.’’

It was certainly not what Prime Minister Tony Abbott had been hoping for.

Indeed, so confident was the government mid-week that it had stitched up a deal for a speedy repeal with the Palmer group, and its loose ally, Senator Ricky Muir of the Motoring Enthusiast Party, that the PM’s office purchased food for a celebratory afternoon tea on Wednesday afternoon.

On Thursday morning, on the other side of the country in Perth, Abbott was still keenly anticipating victory that day.

He and Japanese Prime Minister Shinzo Abe had flown nearly 4000 kilometres to Rio Tinto’s West Angelas mine to emphasise deepening trade and economic ties between the two nations before heading to the Western Australian capital for a dinner to mark the end of Abe’s visit.

Early on Thursday, Abbott dropped in on a TNT Express warehouse in Perth.

The visit was supposed to be a triumphal one for the Prime Minister who, after campaigning against the carbon tax since mid-2010 on factory floors across the nation, would finally be able to dance on its grave.

“Today should be the day when the carbon tax is finally scrapped. Today should be the day when the Parliament acts upon the clear mandate of the people in the election last September,’’ Abbott told the assembled reporters.

But it was not to be.

Palmer and his crossbench senators had other ideas, drawing up amendments overnight on Wednesday that would impose harsher penalties for companies that withheld price cuts from consumers after the tax was axed.

Exactly what the fine detail of these fresh amendments added up to was still puzzling many on Friday, not least an alarmed business community. It's worried that the government, in its eagerness to woo Palmer, is loading companies up with even more burdensome regulation.

Both Milne and Labor Senate leader Penny Wong complained they were unable to get clarity from government Senate leader Eric Abetz during the final hours of the Senate sittings this week about how far the Palmer amendments broadened the scope of planned sanctions. Palmer and Environment Minister Greg Hunt were still insisting that only power and energy companies would be affected. But PUP Senator Dio Wang from Western Australia gave The Australian Financial Review a contrary view, reportedly saying that the expanded sanctions would apply to any business that supplied goods and services.

One source involved in drafting the amendments – which did not proceed on Friday because the Palmer party withdrew them after the Senate clerk questioned their constitutionality – conceded they needed refining over the weekend before their planned introduction into the lower house on Monday.

Speaking to Fairfax from New Zealand, Palmer insisted he and Wang were not in conflict, and that the new strictures posed by his amendments were indeed confined to electricity and gas providers.

Asked if he needed to issue a clarifying statement for business he replied airily: ‘‘I don’t think there is any urgency for it; we haven’t determined the final act or anything. They [business] can get all het up for one or two days, it will just make them more relieved when they [eventually] find out.’’

The legislation goes back to the House of Representatives on Monday to accommodate the latest Palmer demands. Given the mercurial nature of the Queensland billionaire, it might be lucky to pass next week.

One question on many lips is why Treasurer Joe Hockey chose this, of all weeks, to be on holidays.

At the beginning of July Hockey’s office was quoted as saying it was the ‘‘least impactful time’’ for the Treasurer to take a break.

Nothing, as it turned out, could have been more wrong, especially with Abbott squiring Abe from one end of the country to the other.

‘‘Hockey should have been there on the ground, it's his budget going down the chute,’’ said one concerned Coalition insider.

‘‘When you are talking turkey on these things, you have to have the authority to start talking about what you are prepared to change. That has got to be the key ministers responsible.’’

Hockey’s absence was even more mystifying given that the latest Senate gyrations have blown further holes in his already embattled austerity budget.

Palmer added a $9 billion hole as he announced that PUP wanted Labor’s Schoolkids Bonus, low-income superannuation guarantee and instant asset write-offs for small business kept, even as the mining tax that funded the measures was set to be repealed.

Rubbing salt into the wound, Labor, Greens and crossbench senators teamed up to keep $1.5 billion in tax relief scheduled to go under the carbon tax repeal, while Muir announced the carbon tax vote would not go ahead unless the Australian Renewable Energy Agency was saved.

By some estimates, $43 billion in savings and tax measures over four years had been blocked by the end of the week.

Many observers, even those sympathetic to Abbott's agenda, are now muttering the government has brought much of this week’s mayhem on itself. Rather than giving the incoming senators – those elected last September, but taking their positions from July 1 – the customary few weeks to settle in, the Coalition took the almost unprecedented step of having the new Senate sit from the beginning of July.

This required the new senators to get their heads around a complex package of nearly a dozen bills on a hot-button issue, having only just hired staff and set up their offices.

The government then tried to ‘‘guillotine’’ the carbon tax repeal package through the upper house, cutting short the usual time for reflection and debate which would have allowed a more orderly assessment of the hastily drafted Palmer amendments.

Palmer seized on this to argue that if the government had acceded to his demand for more specialist staff he might have been in a better position to give it the quick result it wanted.

He told Fairfax: ‘‘They [ministers] may now realise this sort of thing is not good for the operation of the Senate. We can only deal with so much at one time.’’ Some other crossbenchers have also been unhappy at what they claim is the born-to-rule attitude of the government.

In Opposition, Abbott pledged that ‘‘there will be no be deals done with independent and minor parties under any political movement I lead.’’

But the results of last year’s election have given him little choice.

The incoming senators (half the chamber’s 76 members) are among the most diverse group the upper house has ever hosted, with eight from minor parties, including the Palmer United party trio, Jacqui Lambie, Wang and Glenn Lazarus. The others are Muir, independent Nick Xenophon, the libertarian David Leyonhjelm, the Democratic Labour Party’s John Madigan and Family First senator Bob Day.

The reality of the Senate numbers now is that if all 76 members of the chamber are present, the government needs six of the eight crossbench senators to get anything past a Labor-Green blocking motion.

Having known this months in advance, ministers seem to have put minimal effort and forethought into wooing this diverse array of individuals.

Glenn Druery, senior adviser to Muir, said in wonderment at the end of this week:

‘‘Not a single minister, not a single member of the government, has come and knocked on the door and offered to buy us a coffee or have a chat. It should have begun weeks ago. If I could give the government some gentle advice I would say they need a little more empathy with those they have to deal with."

Some in the Coalition are pointing the finger, too, at government Senate leader Abetz, a stiff performer not known for his ability to turn on the charm.

And Hunt also has turned in a less than stellar performance, failing to give any consistent account of the technical impact of the Palmer amendments and why they had to be withdrawn on Thursday.

Astonishingly, he told ABCTV’s 7.30 on Thursday evening that he had no idea why the Palmer amendments had been withdrawn.

(In fact it was because some Senate officials felt the Palmer changes might have been construed as a money bill, which the Senate is not allowed to initiate.)

Evidence of Abbott’s mounting frustration slipped out on Friday morning when he mused on Sydney commercial radio that he might have to call another election if the government's ''difficulty'' continued for six to 12 months, though he later walked away from those comments.

Mostly he, acting Treasurer Mathias Cormann, Abetz and Hunt have been at pains to avoid giving offence to the PUP group this week, despite the latter's ability to swing a wrecking ball through Coalition plans.

Speaking to Fairfax on board his plane on Thursday, Abbott refused to criticise Palmer – though he predicted a lot of “shouting from the sidelines ... a lot of colour and movement”.

He maintained he was still “very confident” the government would keep its four key election commitments.

‘‘I will work very patiently, my colleagues and I will work very patiently with crossbenchers to implement our budget proposals.”

On the evidence of this week, he will have to bring a lot more finesse to that task than the government has so far demonstrated.